WASHINGTON — The U.S. unemployment rate hit 14.7 per cent in April, the highest rate since the Great Depression, as 20.5 million jobs vanished in the worst monthly loss on record. The figures are stark evidence of the damage the coronavirus has done to a now-shattered economy.
The losses reflect what has become a severe recession caused by sudden business shutdowns in nearly every industry. Nearly all the job growth achieved during the 11-year recovery from the Great Recession has now been lost in one month.
The collapse of the job market has occurred with stunning speed. As recently as February, the unemployment rate was a five-decade low of 3.5 per cent, and employers had added jobs for a record 113 months. In March, the unemployment rate was just 4.4 per cent.
The government’s report Friday noted that many people who lost jobs in April but didn’t look for another one weren’t even counted in the unemployment rate. The impact of those losses was reflected in the drop in the proportion of working-age Americans who have jobs: Just 51.3 per cent, the lowest on record.
In addition to the millions of newly unemployed, 5.1 million others had their hours reduced in April. That trend, too, means less income and less spending, perpetuating the economic downturn. A measure of what’s called underemployment — which counts the unemployed plus full-time workers who were reduced to part-time work — reached 22.8 per cent, a record high.
Though some businesses are beginning to reopen in certain states, factories, hotels, restaurants, resorts, sporting venues, movie theaters and many small businesses are still largely shuttered. As companies have laid off tens of millions, lives have been upended across the country.
[ Sign up for our Health IQ newsletter for the latest coronavirus updates ]
One of the newly unemployed, Sara Barnard, 24, of St. Louis, has lost three jobs: A floor manager at a pub and restaurant, a bartender at a small downtown tavern and the occasional stand-up comedian. Her main job was at McGurk’s, an Irish pub and restaurant near downtown that closed days before St. Patrick’s Day. She had worked there continually since high school.
McGurk’s tried selling food curbside, Barnard said, but it was costing more to keep the place open than the money that was coming in. Around that time, the bar where she worked closed, and comedy jobs ended when social distancing requirements forced clubs to close.
McGurk’s is a St. Louis landmark, and Barnard expects it to rebound quickly once it reopens. She just doesn’t know when.
Job losses and pay cuts are ranging across the world. Unemployment in the 19-country eurozone is expected to surpass 10 per cent in coming months as more people are laid off. That figure is expected to remain lower than the U.S. unemployment rate. But it doesn’t count many people who either are furloughed or whose hours are cut but who receive most of their wages from government assistance.
In France, about half the private-sector workforce is on a government paid-leave program whereby they receive up to 84 per cent of their net salary. In Germany, 3 million workers are supported in a similar system, with the government paying up to 60 per cent of their net pay.